New Technology Boosts Production Offshore California

A suite of new technologies is enabling independent oil and gas producer Venoco Inc. to find and tap into previously overlooked oil deposits in the Santa Barbara Channel, while improving the environmental impact of production operations. This "one-two" punch was made possible with the help of the Department of Energy's Office of Fossil Energy, which is helping to fund the technology development effort.

The project supports the President's goal of increasing national security through increased energy independence. Over the next 20 years, U.S. oil consumption will rise more than 40 percent, far exceeding production. "On our present course, America will import three out of every four barrels of oil it consumes in 2025, increasing our dependence on foreign powers which do not always have America's best interest at heart," said Mike Smith, Assistant Secretary for Fossil Energy. "A key to reducing our Nation's dependence on foreign oil is technology development."

The new technologies have allowed Venoco to overcome a two-decades-old ban on new seismic surveys in the Santa Barbara Channel. "Seismic surveys use very special sound waves to produce images of the layers of sand and rock in a reservoir, and are the most common technology used to explore for oil," said Gary Walker of the National Energy Technology Laboratory (NETL), which manages the technology-development project for the Energy Department. Environmental regulations established in 1982 prohibit new seismic surveys in the channel because vibrations from the sound waves may potentially harm marine mammals.

Even without the ban, producing gas and oil from Venoco's South Ellwood field, two miles offshore Santa Barbara, California, is a challenge. From the field's discovery in 1969 until 1998, only 49 million barrels of oil were recovered-just 5 percent of the estimated 1 billion barrels of oil held in the reservoir. "Most reservoirs would have produced about 20 percent of the oil over this period," said Walker.

Production from the reservoir is highly variable because of its many rock layers-inches to feet thick-which have been folded and broken by the action of earthquakes forming faults along the California coast. The twisted and broken layers make it difficult to locate the best position for wells, and cause the wells to produce larger volumes of water than of oil. This high water production makes economic oil development hard because the water needs to be disposed of in an environmentally acceptable manner-an expensive undertaking.

Extracting oil from the South Ellwood field is also difficult because all drilling and producing operations in the field are confined to a single platform, named Holly, a manmade steel island two miles offshore. All wells start at a single point, and must be directed horizontally and vertically as far as five miles away to access the oil deposits. By combining three new technologies-off-the-shelf software to reanalyze the old seismic data, a modern logging instrument that can be lowered into old wells to make close-up observations of the rocks in a reservoir, and newly developed software that uses the reanalyzed seismic data and the close-up observations to create a detailed model of the reservoir-Veneco has gained a much clearer picture of the reservoir, and boosted production.

The model better identifies where there is oil and where there is water, and has allowed Veneco to redesign old wells to produce the oil, but not the water. The new technologies have increased production in five old wells by an additional 600 barrels of oil per day. The model also identified three new pockets of oil, holding a total of 80 million barrels. The first well drilled in 2002, after modeling the reservoir, has yielded 800 barrels of oil daily, making it the best well in the field.

The environmental benefits of the project should prove just as striking as the increase in production. "Oil companies have a responsibility to preserve and, if possible, improve the environment in the areas where they produce oil," said NETL's Walker. "With the new reservoir model in hand, Venoco is poised to enhance the environmental condition of the Santa Barbara coastline."

The Santa Barbara Channel has huge, natural seeps where gas bubbles to the surface and oil oozes into the ocean from cracks in the seafloor-causing an oily sheen on the water and, to the dismay of beachgoers, collecting onshore as globs of tar. These seeps have been known for millennia. Archeological evidence shows that Native Americans used the tar to waterproof woven water bottles and plank boats, and to cement fractures in broken bowls and vessels.

In the 1980s, two 350-ton, 50-foot high steel pyramids called "seep tents" were positioned on the ocean floor to capture gas and oil from the seeps in South Ellwood field. Collecting the gas and oil has eliminated the oily sheen on the ocean, reduced pollution of the sea water, made the Santa Barbara Channel healthier for marine mammals, and eliminated new tar on the beaches.

"The number of sea otters and seals has increased, and beachgoers are less likely to pick up sticky tar on the bottoms of their feet," said Walker. "The seep tents have also cleared the air. Natural gas in the atmosphere is a hydrocarbon pollutant and greenhouse gas; preventing the gas from entering the air is like removing 35,000 cars from the roads in and around Santa Barbara."

Venoco is now considering building a third seep tent on a natural fault leak identified by the new reservoir model. Like the earlier seep tents, a third should improve oil production while improving the environment. Others plans for the South Ellwood Field include testing new offshore water separation units that will separate the oil from the water and allow the water to be reinjected into rock layers below the ones which produce oil. This will lower costs and reduce the environmental risks of bringing the oil and water onshore to separate and dispose of the contaminated water.
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